Economy and politics
The economy of Spain represents the twelfth largest economy in the world. The most important economic sectors are tourism, communications and information technology, the metalworking industry, mechanical engineering, agriculture and petrochemicals. The most important export and import partners are France and Germany.
Since the 1978 constitution, Spain has been a parliamentary monarchy. It declares Spain to be a social and democratic constitutional state, committed to freedom, justice, equality and political pluralism. The Spanish people, from whom all state power emanates, are the bearers of national sovereignty. The head of state stands as a symbol of unity and permanence. His duties are to appoint or remove the Prime Minister and the members of the Government.
Since 2007, the Spanish economy has been experiencing considerable difficulties. After 15 years of economic growth before that, the recession began then and the unemployment rate is now one of the highest in Europe (in 2007 it was only 8%, in 2013 it was around 25%). The real estate and banking sectors have been particularly hard hit. The previously moderate level of public debt has increased very sharply since 2008.
Spaniards are also known for their banks and tourism. The major Spanish companies were banks with the leading banks Banco Santander, the second largest financial institution in Europe, and Banco Bilbao Vizcaya Argentaria, with a focus on Spain, Portugal and Central and South America.
Large individual companies include the telecommunications group Telefónica, the utilities Iberdrola and Gas Natural, the insurance company Mapfre, the infrastructure company Abertis and the textile company Inditex.
Spain was hit very hard by the pandemic. In 2021, Spain wanted to overcome the Corona virus. But the economy is down and the coffers are empty.
In the past, Spain was a strongly agricultural state, but in recent decades only industry has gained in importance. Thus, the most important sectors of Spanish industry are petrochemicals, agriculture, metalworking, mechanical engineering, communications and tourism. Another typical sector is the construction industry with Grupo ACS and Ferrovial at the top.
The largest companies
Aena, the largest airport operator in Spain. Aena is the owner and operator of no less than 46 Spanish airports, making it the clear number one in the country. With more than 264 million guests per year, they make the company one of the best-known airport operators in the world. This creates one of the deepest moats: If you want to fly as a tourist to Palma de Mallorca, to Ibiza, to Barcelona or to the Canary Islands, you "must" land at one of Aena's airports. Since new airports are no longer approved, Aena has a natural monopoly. This monopoly allows for a particularly high cash flow. This is an incredible EUR 1,500 million per year, making Aena a real cash machine. The shareholders earn a share via high dividends.
Another large and well-known company among investors is Iberdrola S.A. The company is a Spanish power generation and distribution company based in Bilbao. In 2008, the company was the seventh largest European electricity producer. Its core businesses include the generation, transmission, distribution and marketing of electricity and natural gas. The Spanish company's services reach around 16 million customers, nine million of them in Spain. The company is also one of the largest producers of hydro, thermal and nuclear energy in Spain. The company covers the supply of electricity in almost all of Spain.
As already mentioned above, Banco Santander, which also has a number of branches in Germany, is a Spanish universal bank. The bank is active in retail and corporate banking. For private customers and smaller companies, the company offers daily payment transactions as well as credit cards, consumer loans, loans or investments. For larger companies, the banking institution provides consulting, cash management, risk management or even asset management. The company's network consists of about 12,000 branches worldwide. The bank focuses its activities on 10 core markets: Spain, Germany, Poland, Portugal, the UK, Brazil, Mexico, Chile, Argentina and the USA. However, it also operates in other countries. Together with Elavon, a provider of international payment processing, Banco Santander operates a joint venture for retailer services.
The largest and most important trading centers
Madrid is also home to Spain's most important stock exchange, located in the Palacio de la Bolsa. The stock exchange is the largest of a total of four stock exchanges in Spain, with further exchanges located in Barcelona, Bilbao and Valencia. Another trading center is Bats Europe.
Price development of the indices
The IBEX 35 (Iberia Index) is a stock index, which comprises the 35 most important Spanish companies. The index was introduced on January 14, 1992.
The index base is 3,000 points as of December 31, 1989. Unlike the DAX, it is a price index without the influence of dividends. Currently, the IBEX 35 index stands at over 8,700 points. The largest weighted companies in the index are Iberdrola, Inditex, Banco Santander and Cellnex.
Trading hours in Spain
Exchange trading is conducted during trading hours from 09:00 to 17:35 local time.